The Texas Real Estate Commission (TREC) regularly tweaks the various contracts, agreements, notices and addenda that home buyers and sellers and their agents use. The common One to Four Family Residential Contract – that is, the contract typically used to resell a home – has had a number of changes that will soon go into effect. We recently attended an online class taught by J. C. Johnson, outside counsel to Old Republic Title Co. This is what we learned:

The new forms will be used voluntarily starting February 16, 2021, and will become mandatory on April 1. Here are some of the changes to expect if you are buying or selling a home.

  • The biggest change is in Paragraph 5. This revised section now combines payment of earnest money and option fee in a single provision and calls for payment of both to the title company. Yes, both payments – and they may be combined into a single check – are now delivered to the escrow agent (usually at the title company). You may recall that in the past the termination option fee was written to and delivered to the seller. The buyer (or agent) must now deliver the option fee to the escrow agent within three days after the effective date of the contract. Paragraph 23 has been deleted since it is now redundant.

Under the revised forms, the buyer authorizes the escrow agent to release and deliver the option fee to the seller at any time without further notice to or consent from the buyer, and releases escrow agent from liability for delivery of the option fee to the seller. If the buyer gives notice of termination within the time prescribed: (i) the option fee will not be refunded and the escrow agent will release any option fee remaining with the escrow agent to the seller; and (ii) any earnest money will be refunded to the buyer.

  • The growth of wireless controllers – think smart houses with their wireless control of lights, AC, music, security cameras, kitchen appliances, etc. – has inspired Paragraph 10C. A smart devices section was added to clarify that those devices get transferred with the sale of the property. Here’s the added language:

Smart Devices: “Smart Device” means a device that connects to the internet to enable remote use, monitoring, and management of: (i) the Property; (ii) items identified in any Non-Realty Items Addendum; or (iii) items in a Fixture Lease assigned to Buyer. At the time Seller delivers possession of the Property to Buyer, Seller shall: (1) deliver to Buyer written information containing all access codes, usernames, passwords, and applications Buyer will need to access, operate, manage, and control the Smart Devices; and (2) terminate and remove all access and connections to the improvements and accessories from any of Seller’s personal devices including but not limited to phones and computers.

  • Paragraph 2C, which is deals with Accessories, has updated the definition of controls to include both software and applications used to access and control accessories along with dedicated hardware solely used for the accessory. This is now part of the Page 1 paragraph that concerns curtain rods, window shades, fireplace screens, mailbox keys, swimming pool equipment and such.
  • Disclosure language at the bottom of the Broker Information page was updated regarding broker compensation. Additionally, it now contains more space for team names.

TREC held a special meeting to propose updating two forms previously omitted from consideration: Notice of Buyer’s Termination of Contract and the Short Sale Addendum. They will be considered for adoption at TREC’s February 16, 2021, meeting to ensure conformity with changes regarding the delivery of option fee, so that all forms will be ready for the April 1 effective date.

To see a copy of the One to Four Family Residential Contract with proposed changes, click here. For more information about the new real estate contracts, visit